Indus Polyester Company limited - Annual Reports 2003

INDUS POLYESTER COMPANY LIMITED

CONTENTS

COMPANY INFORMATION

Chairman

Mr. Shaikh Mohammad Yousuf

Executive Directors

Mr. Naeem Akhtar yousuf

Mr. Tariq Yousuf

Non Executive Directors

Mrs. Zuhra Yousuf

Mrs. Kausar Naeem

Mrs. Nabila Tariq

Ms. Gul Naeem

Board Of Audit Committe

Mr. Tariq Yousuf

Chairman

Mr. Naeem Akhtar

Member

Ms. Gul Naeem

Member

Chief Executive Officer

Mr. Naeem Akhtar Yousuf

Chief Financial Officer

Mr. Muhammad Hussain

Company Secretary

Mr. Muhammad Hussain

Auditors

Hyder Bhimji & Co.

Chartered Accountants

Registered & Head Office

D-l 94, S.I.T.E., Karachi

Phon# 6653371

Factory

157-161 A, Phase -V,

Hattar Industrial Estate,

District - Haripur

Phone* 0995-6 17038

NOTICE OF THE MEETING

Notice is hereby given that the Eleventh Annual General Meeting of the Shareholders of Indus Polyester

Company Limited will be held on Monday 27th October 2003 at 04:00 p.m. at Registered Office D-194,

S.I.T.E., Karachi to consider the following Business.

1. To confirm minutes of Tenth Annaul General Meeting.

2. To receive and approve audited Statement of Accounts & Balance Sheet of the company for the year

ended 30th June 2003 together with reports of Directors and Auditors thereon.

3. To appoint Auditors of the Company and fix their remuneration for the year ending 30th June 2004,

M/s. Hyder Bhimji & Co., who retire offer themselves for re-appointment.

4. To transact any other business with the permission of Chair.

By order of the Board

MOHAMMAD HUSSAIN

Karachi: September 30, 2003. Company Secretary

NOTES:

1. Share Transfer books of the Company will be closed from 19th October to 28th October 2003, both

days inclusive. No transfers will be accepted for registration in the names of the transferees during this

period.

2. ^J A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a Proxy and

such Proxy will have the right to attend instead of him/her, speak and vote in place of the member.

A proxy must be a member of the company. Forms of proxy in order to be valid, must be deposited at

the Companys Registered office D-194, S.I.T.E., Karachi - 75700, not less than 48 hours before the

time appointed for the meeting.

3. Shareholders are requested to promptly notify the Company of any change in their address to ensure

delivery of mail.

4. To facilitate identification, for right to attend the Annual General Meeting, shareholder whose holdings

are on the Central Depository System (CDS) or his/her proxy should be authenticate his/her identity by

showing his/her original National Identity Card (NIC) or original Passport at the time of attending the

meeting, alongwith the participants Identity Number and Shareholders account number allocated by

the Central Depository Company.

In case of corporate entity, the Board of Directors, Resolutions/Power of Attorney with specimen signature of

the nominee shall be produced at the time of the meeting.

DIRECTORS REPORT TO THE MEMBERS

We are pleased to submit to you the 11^th Annual Report along with the Audited Accounts of the Company for

the year ended 30th June '2003.

REVIEW

The Year under review had been a very difficult year for the Polyester Filament Yarn Industry in Pakistan.

Custom duty on imported Polyester Filament Yarn was reduced by the government to 20% which is now at

par with the custom duty of 20% on Polyester Chips, the primary raw material of the company. This reduction

in Custom Duty on Finished Polyester Filament Yarn resulted in influx of Imported Yarn. The yarn prices were

already subdued due to dumping of yarn at unrealistic prices, came under further pressure due to the reduction

of custom duty. Several representations were made to the government by Filament Yarn Manufacturers

Association but the government response and support was not forthcoming. There is no rationale or justification

for the government to have the same rate of custom duty on Polyester Chips which is the primary raw

material for Producing Polyester Filament yarn and the Finished Imported Yarn. One can realize the hardship

which is being faced due to this anomaly and it is regrettable that the policy makers are not realizing the grave

nature of the issue.

Last year the import of Yarn was to the tune of 32,000 tons which has now crossed the figure of 40,000 tons

during the year.

Due to adverse market conditions the plant operated at 64.5% of its capacity.

OPERATION AND FINANCIAL RESULTS

The financial results of the company for the year under review are given hereunder:

2003

2002

Rs. '000

Operating Loss / Profit

-33,462

-4,150

Financial Charges

1,285

29,750

-34,747

-33,900

(Loss) / Profit on Sale of Fixed Assets

—

-7

Loss before Taxation

-34,747

-33,907

Provision For Taxation

-294

—

Loss after Taxation

-35,041

-33,907

PRESENT SCENARIO

Domestic Industry of Polyester Filament Yarn is under great stress. The reduction of Tariff on imported yarns

and dumping by Indonesia , Korea and Thailand has resulted in erosion of margins for the industry.

The total capacity installed in the country is 105,000 tons per annum out of which only 60% of the capacity is

being utilized.

Government has to realize the importance of domestic production of goods and has to come forward in

support of the local industry. It is not prudent to let the local industry suffer and render the huge investments

made in local manufacturing sector unproductive.

FUTURE STRATEGY

The company is aware of this dire situation and every effort is being made to cut down the cost and make the

operation viable. Efforts are being made to make a settlement with the bank so that financial cost is done

away with and the company is brought to sound footings.

In these difficult times company has been able to carry out some research and it is hoped that it will bear

fruits and cost saving will be possible.

Every effort is being made to increase exports and this year the exports worth Rs. 2.33 millions were made as

against Rs 1.22 millions in the previous year.

The emphasis of the company is on diversification and cost reduction.

PATTERN OF SHARE HOLDING

Statement showing pattern of holding as on June '30 2003 is annexed to this report.

EMPLOYEE RELATIONS

Company's relation with Labour & Staff continued to remain cordial. We wish to record our appreciation for

the devotion and hard work of the executive, staff members and workers of the company.

AUDITORS

The present auditors M/s Hyder Bhimji & Co., Chartered Accountants, retire and being eligible offer themselves

for reappointment.

As required by the code of corporate governance, The Board Audit Committee has recommended the

re-appointment of M/s Hyder Bhimji & Co. Chartered Accountants, as auditors of the Company for the ensuing

year.

STATEMENT ON CORPORATE AND FINANCIAL REPORTING FRAME WORK

a. The financial statements, cash flow and changes in equity, prepared by the management of the

Company, present fairly it's state of affairs and the result of it's operations.

b. Company has maintained proper books of accounts.

c. In preparation of financial statements, appropriate accounting policies have been consistently applied

and accounting estimates are based on reasonable and prudent judgement.

d. In preparation of financial statement International Accounting Standards, as applicable in Pakistan,

have been followed and non-applicability, if any.has been adequately disclosed.

e. Internal auditor is continuously reviewing the existing system of internal control and other procedures.

The process of review will continue and any weakness in controls will have immediate attention of

the Management.

f. There are no doubts upon the Company's ability to continue as a going concern.

g. The Corporate Governance regulations, as detailed in the listing regulations, have been fully

implemented.

h. Key operating and financial data for the last six years in summarized form is annexed.

i. The following is the value of investments based on respective audited accounts (as on 30^th June,

2003):

Provident Fund Rs. 3,952,5297-

During the year (6) meetings of the Board of Directors were held. Attendance by each Director is as

follows:-

Name of Director

No. of Meeting Attended

Mr. Shaikh Mohammad Yousuf

Mr. Naeem Akhtar Yousuf

Mr. Tariq Yousuf

Mrs. Zuhra Yousuf

Mrs. Kauser Naeem

Mrs. Nabila Tariq

Ms. Gul Naeem

In closing, please join me in my prayers to Allah The Beneficent, The Merciful, The Provider to Bless our

efforts and operation with ever increasing Bounties as Befits His Glory - Aameen.

On Behalf of the Board

Karachi: September 26, 2003. NAEEM AKHTAR YOUSUF

Chief Executive